The European Comission has asked France to end its unlimited financial guarantee to La Poste,saying it constitutes state aid that could breach EU competition law.
France’s guarantee allows the postal operator to obtain finance “on more favourable terms”than its rivals, the Commission said, “giving it an advantage over its competitors and thusdistorting competition (in) a market which is in the process of being liberalised.”
The Commission, which in December 2003 forced the withdrawal of the unlimited guaranteegranted to another French public enterprise, Electricité de France, this week gave the country’sgovernment one month to respond to its recommendation that it ends the La Poste guarantee by theend of 2008.
“As part of its monitoring of existing state aid schemes under the EC Treaty, (we) examinedthe guarantee under which the state has responsibility for liabilities entered into by La Poste,” astatement from the Commission said on Wednesday.
The Commission’s investigation into the government guarantee surfaced at the end of lastyear, when La Poste transferred its banking and financial business to a subsidiary, La BanquePostale. The transfer was unclear and did not cover the question of the guarantee, the Commissionsaid.
“La Poste is not subject to the insolvency and bankruptcy procedures provided for underordinary law,” said the Commission.
“In the event of financial failure of the post office, the state could be held responsible(as a) last resort for its rights and obligations.
“This situation is tantamount to a state guarantee that is unlimited in amount and induration and covering all of the liabilities of La Poste.”
However, the EU executive added: “The Commission’s action does not call into question thestatus of La Poste as a legal entity governed by public law or its public ownership.”
